For tax years 2025 through 2028, people age 65 and older can take a new deduction of up to $6,000 each, on top of the regular standard deduction and the existing extra standard deduction for age. The IRS calls it the “enhanced deduction for seniors.” It was created by the One Big Beautiful Bill Act (OBBBA, P.L. 119-21, signed July 4, 2025), which the IRS also refers to as the Working Families Tax Cuts.
This article is for green-card holders who receive Japanese pensions (national pension, employees’ pension, or a corporate pension) and file U.S. returns, and for couples where one spouse lives in Japan. It covers the amount, the years, the income phase-out, the SSN and joint-filing rules, nonresident aliens, and how the deduction stacks with the standard deduction. How Japanese pensions themselves are taxed in the U.S. is covered in our related articles.
The deduction applies again on your 2026 return (filed in 2027), so the end of the year is a good time to estimate your income and decide how you will file.
Key points
- For each year from 2025 through 2028, anyone who is 65 or older at the end of the year can deduct up to $6,000 ($12,000 for a married couple if both qualify).
- It is separate from the standard deduction and the additional standard deduction for age, and you can claim it whether you take the standard deduction or itemize.
- It phases out by 6% of modified adjusted gross income (MAGI) above $75,000 ($150,000 for joint filers). Each person’s amount reaches zero when MAGI is $100,000 over the threshold.
- You need a valid Social Security number that is valid for employment, and married couples must file jointly. A spouse with only an ITIN does not qualify.
- The part of your Japanese pension that is taxable on your U.S. return is included in AGI, so it can shrink the deduction.
The basics
| Item | Rule |
|---|---|
| Years | Each tax year from 2025 through 2028 |
| Who | Age 65 or older at the end of the year (for 2025, born before January 2, 1961; for 2026, born before January 2, 1962) |
| Amount | Up to $6,000 per eligible person ($12,000 if both spouses qualify) |
| Phase-out | Reduced by 6% of MAGI over $75,000 ($150,000 married filing jointly) |
| SSN | A valid SSN that is valid for employment and issued before the return’s due date, including extensions |
| Filing status | Married taxpayers must file a joint return |
| Where | Figured on Schedule 1-A, Part V, and carried to Form 1040 or 1040-SR line 13b (Form 1040-NR line 13c) |
According to the IRS fact sheet, the deduction is in addition to the existing additional standard deduction for seniors, and it is available to both itemizers and non-itemizers.
Age follows the IRS rule that you turn 65 on the day before your 65th birthday, so someone born on January 1 is treated as 65 at the end of the previous year. A taxpayer who dies during the year qualifies only if he or she had reached 65 at the time of death.
How it stacks with the standard deduction
If you are 65 or older and take the standard deduction, three amounts add up:
| Deduction | 2025 | 2026 |
|---|---|---|
| Basic standard deduction (single / married filing jointly) | $15,750 / $31,500 | $16,100 / $32,200 |
| Additional standard deduction for age 65+ (per person) | $2,000 single or head of household; $1,600 married | $2,050 single or head of household; $1,650 married |
| Enhanced deduction for seniors (per person, full amount) | $6,000 | $6,000 |
For example, a married couple who are both 65 or older in 2026 and below the phase-out would deduct $32,200 + $3,300 ($1,650 × 2) + $12,000 = $47,500.
Two cautions. First, the additional standard deduction for age is available only if you do not itemize, while the senior deduction works either way. Second, the senior deduction is subtracted after AGI (Form 1040 line 13b), so it does not lower your AGI itself.
The MAGI phase-out and your Japanese pension
MAGI for this purpose is figured in Part I of Schedule 1-A. For most people it equals AGI (Form 1040 line 11b). If you file Form 2555 to exclude foreign earned income or housing, exclude income from Puerto Rico, or file Form 4563, the excluded amounts are added back. If you still work in Japan and use the foreign earned income exclusion, the excluded salary counts toward MAGI.
Part V of Schedule 1-A then works like this:
- Subtract $75,000 ($150,000 if married filing jointly) from MAGI.
- Multiply the difference by 6%.
- Subtract that amount from $6,000 (not below zero).
- Claim that amount for each spouse who is 65 or older and has a valid SSN.
Each person’s deduction disappears once MAGI is $100,000 above the threshold ($100,000 × 6% = $6,000): $175,000 for a single filer and $250,000 for a joint return.
If you are a U.S. resident receiving a Japanese pension, the amount you report as taxable on your U.S. return is part of AGI. How Japanese pensions are taxed in the U.S., including the U.S.-Japan tax treaty and the foreign tax credit, is covered in our related articles. The point here is that your Japanese pension, the taxable part of U.S. Social Security, IRA and 401(k) withdrawals, dividends, interest, and rental income all add up to MAGI, and a larger pension can reduce the deduction.
SSN and joint-filing rules: where Japanese families get caught
A valid SSN for this deduction is one that is valid for employment and was issued by the Social Security Administration before the due date of the return, including extensions. Green-card holders normally meet this, but a spouse’s situation can still block the deduction.
Your spouse is a nonresident living in Japan
If you are married, you must file jointly to claim the deduction. If you file married filing separately, you get nothing, even if you are 65 and have an SSN.
IRS Publication 519 explains that a U.S. citizen or resident married to a nonresident alien can choose to treat the nonresident spouse as a U.S. resident (often called the section 6013(g) election) and file jointly. But with that choice, both spouses are taxed on worldwide income for the year, and neither can use a tax treaty to claim to be a nonresident of the United States. If your spouse has Japanese wages, pension, or rental income, the extra U.S. tax can outweigh the senior deduction, so run the numbers both ways.
Your spouse has only an ITIN
Even on a joint return, only a spouse with a valid SSN can claim the deduction. If your spouse has only an ITIN (Individual Taxpayer Identification Number), that spouse’s $6,000 is not available, and only your share can be claimed.
You kept your green card but live in Japan
A green-card holder living in Japan is generally still a U.S. resident who files Form 1040 and reports worldwide income, and can claim the deduction if the requirements are met. If you instead claim to be a resident of Japan under the treaty tie-breaker rule, you file Form 1040-NR with Form 8833 and compute your tax as a nonresident alien. Publication 519 warns that in certain instances being treated as a nonresident under a treaty tie-breaker can trigger the section 877A expatriation tax.
Can nonresident aliens (Form 1040-NR) claim it?
The 2025 Instructions for Form 1040-NR tell nonresident filers to enter Schedule 1-A deductions, including the enhanced deduction for seniors, on Form 1040-NR line 13c. Publication 519 says nonresident aliens generally are not eligible for the car loan interest deduction, but it says nothing similar about the senior deduction. The IRS also notes that the special rules for U.S. nationals and residents of Canada, Mexico, and South Korea (among others) do not apply to the senior deduction.
However, a Form 1040-NR filer cannot file a joint return, so a married nonresident cannot meet the joint-filing requirement. And because nonresident aliens are taxed only on U.S.-source income and income connected with a U.S. business, there may be little or no U.S. taxable income for the deduction to reduce. For receiving U.S. Social Security while living in Japan, see the related article.
Worked examples (2026)
Example 1 (hypothetical): a married couple in New York, both green-card holders aged 66 and 65, both with valid SSNs, filing jointly and taking the standard deduction. Their 2026 MAGI, made up of the taxable part of their Japanese pensions, the taxable part of U.S. Social Security, and IRA withdrawals, is $170,000.
| Step | Amount |
|---|---|
| MAGI − $150,000 | $20,000 |
| × 6% | $1,200 |
| Senior deduction per person ($6,000 − $1,200) | $4,800 |
| For both spouses | $9,600 |
| Standard deduction $32,200 + additional $3,300 | $35,500 |
| Total deductions | $45,100 |
| Taxable income ($170,000 − $45,100) | $124,900 |
Their taxable income falls in the 22% bracket of the 2026 joint rate schedule ($100,800 to $211,400), so the $9,600 senior deduction saves roughly $2,112 of federal income tax ($9,600 × 22%).
Example 2: if the same couple’s MAGI reaches $250,000 or more in a year, for instance because of a one-time increase in pension income, the senior deduction is zero for that year. The standard deduction and the additional deduction for age still apply.
Example 3: you are 67, a green-card holder with an SSN living in the U.S.; your 66-year-old spouse is a Japanese national living in Japan with no SSN. Filing separately, you get no senior deduction. If you choose to treat your spouse as a U.S. resident and file jointly, your own share (up to $6,000) may be available, but your spouse’s worldwide income for the year becomes subject to U.S. tax.
FAQ
Is this a deduction for my Japanese pension?
No. It is available to anyone 65 or older who meets the requirements, whatever their income type. But the taxable part of a Japanese pension is included in MAGI, so it affects the amount.
Can I take it if I itemize?
Yes. It is available with either the standard deduction or itemized deductions. The additional standard deduction for age, however, is only for those who take the standard deduction.
What if only one spouse is 65?
On a joint return, the spouse who is 65 or older and has a valid SSN gets up to $6,000. The phase-out threshold is the joint $150,000.
How long does it last?
Tax years 2025 through 2028, according to the IRS fact sheet.
My spouse has an ITIN. Should we get an SSN?
The deduction requires an SSN that is valid for employment and issued by the return’s due date, including extensions. Whether your spouse can get one depends on immigration status, so it needs to be checked case by case.
At CLT NY INC., an IRS Enrolled Agent can prepare returns for green-card holders and couples receiving Japanese pensions, compare joint and separate filing with the senior deduction in mind, and review treaty positions, in English or Japanese. Contact us.
Related articles
- How Japanese Pension and Real Estate Income are Taxed in the U.S.: A Complete Guide for U.S. Residents
- Receiving U.S. Social Security in Japan: How to Apply from Abroad, Form SSA-7162, and How the Benefits Are Taxed
- Japanese Pensions and US Social Security: How Totalization Under the US-Japan Agreement Can Qualify You for Benefits
- Filing US Taxes as an H-4 or L-2 Spouse: How Employment Status Changes Your Filing Options, and the Section 6013(g) Trap
- Mastering Form 8833 for U.S.-Japan Tax Treaty Benefits: Pensions, Withholding Tax Reduction, and Disclosure Requirements
- The Definitive Guide to Filing US Tax Returns (1040/1040NR) from Japan After Repatriation: Procedures, Payment, and Refund Methods
Sources: IRS FS-2025-03, Working Families Tax Cuts: Tax deductions for working Americans and seniors; IRS, Check your eligibility for the new enhanced deduction for seniors (2026); Schedule 1-A (Form 1040) 2025; 2025 Instructions for Form 1040 (Schedule 1-A); 2025 Instructions for Form 1040-NR; IRS Publication 554 (2025), Tax Guide for Seniors; IRS Publication 505 (2026); IRS Publication 519 (2025). Information as of October 2026. This article provides general information and is not individual tax advice.
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